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580 A meeting of the Federal Reserve Board was held in the office of the Federal Reserve Board on ;!ednesday, June 19, 1929 at 12:00 o'clock noon. PRESENT: Governor Young Mr. Platt Mr. Hamlin Mr. Miller Yr. James Mr. Cunningham Mr. McClelland, Asst. Secretary The minutes of the meeting of the Federal Reserve Board held an June 17th were read and approved. Matter approved on initials yesterday, namely, application of the First National Bank in Amboy, Minn., for stock ( 23 shares) in the Federal Reserve Bank of Minneapolis, effective if and when the Comptroller of the Currency issues a certificate of authority to commence business. Formally approved. Telegram dated June 19th from the Chairman of the Federal Reserve Bank Of Philadelphia, advising that the board of directors at a meeting today made no change in the bank's existing schedule of rates of discount and purchase. Without objection, noted with approval. Memorandum dated June 16th from the Chief of the Division of Bank Operations, recommending the appointment of Er. Kenneth R. Iverson, as clerk-typist in the Division at a salary of ,1200 per annum, effective June 26th. Approved. Reports of Committee on salaries and Expenditures on lists submitted by the Federal Reserve Banks of New York, Atlanta and San Francisco, of -2- 6/19/29 employees for whom the directors of those banks approved leaves of absence with pay, on account of illness, during the month of May,where the total of such absences since January 1, 1929 has exceeded thirty days; the Board's Committee recommending approval of the salary payments involved. Approved. Report of Committee on Salaries and Expenditures and Committee on District 47 on letter dated June 14th from the Federal Reserve Agent at Chicago, advising that the resignation of Mr. Frank M. Huston, Manager of his Division oi iesearch and Statistics, becomes effective on June 30th and recommending that Mr. Harris G. Pett be appointed Manager of the Division at a salary of 4?5,600 per annum, effective July 1, 1929; the Board's Committees concurring in the recommendation of the Federal Reserve Agent. Approved. Report of Committee on District 410 recommending the appointment of Lir. John B. Doolin as Director of the Oklalloma City Branch for the unexpired term of 1,r. E. J. 'Murphy, deceased, ending December 31, 1930. Upon motion, Mr. Doolin was appointed as Director of the Oklahoma City Branch for the unexpired term ending December 31, 1930. Letter dated June 17th from the Assistant Federal Reserve Agent at Reserve notes to Cleveland, requesting authority to issue new size Federal 24th,in order that they the Federal Reserve bank, beginning the week of June may be prepared for distribution, with the understanding that none of the circulation earlier than currency will be placed in the mail or released for the date of official release. Approved. 6/19/29 -3- Report of Committee on Examinations on letter dated June 17th from the Federal Reserve Agent at Cleveland, requesting permission to use one Examiner in the Middlefield Banking Company, Middlefield, Ohio, and the Union Savings and Trust Company, Warren, Ohio, at the time those institutions are under examination by the State Banking Department, for the purpose of making investigations along the lines set out in the Federal Reserve Agent's letter of March 22nd, without expense to the member banks; the Board's Committee recommending approval. Approved. Memorandum dated June 18th from General Counsel recommending that there be published in the next issue of the Federal Reserve Bulletin the recent decision of the Court of Appeals of the District of Columbia in the so-called Foreign Financing Corporation case, together with a brief introductory statement relative thereto. Approved. Memorandum from Counsel dated June 17th, submitting a letter from Mr. Otto N. Frenzel, Jr. informally applying for permission to serve as director Of the Merchants National Bank, Indianapolis, Ind., in addition to service as officer of that bank and as director of the Fountain Square State Bank and the Brightwood State Bank, both of Indianapolis; the Law Committee concurring in Counsel's recommendation that the application be approved. Approved. Report of Committee on Examinations on letter dated June 14th from the Pederal Reserve Agent at Chicago, inquiring whether the membership of the Ropkins state Savings Bank, Hopkins, Michigan, whose notice of intention to t- Q -a- 6/19/29 withdraw from the System expires on June 28th, could be continued until September 15, 1929; the Committee calling attention to a previous ruling Of the 3oard that two months will be considered as a reasonable time for the consummation of withdrawal after the six months' period has expired, unless an extension of time is granted, and recommending that the Board grant the Hopkins State Savings Bank a period of three months for consummation of its withdrawal after the expiration of its six months' notice on June 28th. Upon motion, the recommendation of the Committee was approved. Report of Committee on Examinations with further reference to the application of the Brown City Savings Bank, Brown City, Michigan, for permission to reduce its capital from 440,030 to 25,000 for the purpose of removing certain undesirable assets in connection with the extension of its charter by the State Bank Commissioner; the Committee stating that he proposed cap- ital is rather small for the deposit liability of the bank amounting. to A36,000 and recommending, after communication with the Federal Reserve agent at Chicago, that the reduction in capital be approved on the following conditions: (1) That the Bank shall increase its paid-up and unimpaired capital to 40,000, for this purpose setting aside each year into a fund exclusively applicable to such capital increase all of its net earnings for the preceding year prior to the payment of dividends, until such fund amounts to „;;15,000; that whenever such fund shall amount to 41.5,000, it shall be converted into capital by the payment of a stock dividend, or used in anyother manner permitted by state law to increase the capital to the required amount; provided, however, that such increase in capital may be provided in whole or in part by the sale of additional stock. (2) That when the bank's paid-up and unimpaired capital amounts to 440,000, it shall transfer to surplus each year, -5- 6/19/29 until such surplus amounts to 20/ of its paid-up and unimpaired capital 50;') of its net earnings for the preceding year before payments of dividends. Upon motion, the reduction was approved subject to the conditions recommended by the Committee. Matter ordered circulated at the meeting on June 1st, namely, letter addressed to the Secretary of the Treasury under date of May 22nd by the President of the Union Trust Company of Cleveland, with reference to the inclusion a Of that bank in the list of institutions mentioned in the Board's letter of May 3rd to the Chairman of the Federal Reserve Bank of Cleveland on the subject of the misuse of the discount facilities of the Federal Reserve System by member banks. After discussion, the above letter was referred to the Governor for preparation of a reply. Report of Committee on Salaries and -;xpenditures on letter dated June 13th from the Deputy Governor of the Federal Reserve Bank of Minneapolis, advising of the employment of Mr. Lewis Baertsch as a collector at an annual the Board's Committee recommending approval. , salary of ?2,700; Approved. The Assistant Secretary then submitted a memorandum on the subject Of minimum capital requirements for hational banks granted permission to ex- at the ercise trust powers prepared by Mr. Platt as a result of discussion by the Superintendent meeting of the Board on March 18th regarding a request Of Banks of California that the Board require a capital of .4;200,000 for national the policy of his banks granted trust powers in that state, in accordance with a capital of „125,000 which is office in dealing with state banks, rather than -6- 6/19/29 the requirement of state law. In 41:r. Platt's memorandum, it was recommended (1) That in the California case and in every case where the law Board finds a Superintendent of Banks administering the reum legal minim the than r so as to enforce a standard highe and ards; stand r highe quirements, the Board adopt the same the (2) That the Board adopt the policy of the majority of with bank nal no natio states and provide by regulation that isa capital less than 450,000 be granted permission to admin al capit a with bank nal ter trusts, and further, that no natio exan s unles s payer less than 4100,000 be granted full trust and manceptional showing is made as to the bank's condition trust ising exerc n agement and as to the need of an institutio powers in the community. A detailed discussion ensued but no action was taken. It was understood, however, that Sr. Platt 's would secure from the trust section of the Board of ise organization information regarding the exerc by funds trust powers and the investment of trust small national banks. At this point, Yr. Pole joined the meeting. He referred to the fact that y of his Secretary, Mr. S. E. Kimball, under a restriction of the Board the salar salary being 42,900 per annum. is limited to w3,000 a year, his present He qualifications and the work which he is advised the Board of Mr. Kimball's Board would be willing to make an exception Performing and inquired whether the ase in his salary to 43,300 'fl Mr. Kimball's case which would permit an incre Per annum. d, during which members A brief discussion ensue opinion that the action of the Board expressed the would necessitate a genrequested by the Comptroller of secretarial salaries on eral increase in the scale red. the Board and action was defer for a vacation in expects to leave on Tuesday The Governor stated that he hours' notice. led at any time on thirty-six Michigan from which he can be recal might have an opportunity ime, in order that he requested that, in the meant 586 _7- 6/19/29 that meetings of the Board be called to clean up certain matters on his desk 0 o'clock. at 12:00 o'clock noon instead of 11:0 with the The Governor's suggestion was adopted ed may make sact tran be to ness busi understanding that a change necessary. REPORTS OF STANDING COMMITTEES: s changes in stock at Federal Reserve bank Dated, June 17th, Recommending . date this of y Minute Book 18th, as set forth in the Auxiliar . Recommendations approved 19th, y on on an application for fiduciar acti ding Dated, June 18th, Recommen of Book te y Minu povars as set forth in the Auxiliar this date. Recommendation approved. oval of the application of Ir. Nelson appr Dated, June 17th, Recommending e at the same time as uiMcCook, for permission to serv onal Bank, Sumner, rector and officer of the First Nati onal Bank, Los Angeles, Iowa, as director of the jestern Nati of the California National Cal., and as director and officer Bank, Long Beach, Cal. Lpproved. dore oval of the application of Mr. Theo Dated, June 15th, Recommending appr dias at the same time J. Yund, for permission to serve any, Comp ryCounty Trust rector and officer of the Montgome erAmst the of and olficer Amsterdam, N. Y., and as director m, N. Y. dam City National Bank, Amsterda Approved. ge F. approval of the application of Mr. Geor Dated, June 17th, Recommending as time serve at the same Baker, Jr., for permission to and Y., , New York, N. director of the First National Bank , York any, New t as trustee of the United States Trus Comp N. Y. Approved. of the application of Mr. Harry C. oval ding appr Dated, June 18th, Recommen e at the same time as diReynolds for permission to serv , Factoryville, Pa., and rector of the First National Bank Anthracite Trust Company, as director and officer of the Scranton, Pa. Approved. Nilliam approval of the application of Mr. Dated, June 18th, Recommending e at the same time as director ters for permission to serv York, N. Y., and as director New the Port Morris Bank, New York, N. Y. , Bank f the Fordham National Approved. ht(meeting adjourned at d ed:kak Assistant Secretary. Approv
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